Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of: Lakshmi N. Murty Achalla, M.D.,
Docket No. C-146
Petitioner,
Decision No. 1231
- v.
-
The Inspector General.
DATE: March 4, 1991
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION
On October 18, 1990, Administrative Law Judge (ALJ) Charles E.
Stratton
issued a decision concluding that the Inspector General (I.G.)
had
authority to exclude Lakshmi N. Murty Achalla, M.D. (Petitioner)
from
participation in the Medicare program and to direct his exclusion
from
participation in state health care programs 1/ pursuant to
section
1128(b)(4)(A) of the Social Security Act (Act). This provision
permits
the exclusion of any individual or entity --
whose license to provide health care has been revoked
or
suspended by any State licensing authority, or who
otherwise
lost such a license, for reasons bearing on the individual's
or
entity's professional competence, professional performance,
or
financial integrity . . . .
The ALJ found that Petitioner's license to practice medicine had
been
revoked by the Florida Board of Medicine for reasons bearing on
his
professional competence and professional performance. The ALJ
also
found, however, that the I.G.'s exclusion of Petitioner until he
obtains
a valid license to practice medicine in the State of Florida
was
excessive, and instead imposed a three-year exclusion.
On appeal to this Board, Petitioner argued that a three-year exclusion
was
excessive and that no sanction was warranted under the circumstances
of this
case. In response, the I.G. argued that the Board should
reinstate the
I.G.'s original decision to exclude Petitioner until the
State of Florida
restored his license, and that in any event, three
years was the minimum
period of exclusion that should be imposed.
For the reasons stated below, we affirm the ALJ's decision imposing
a
three-year exclusion.
Findings of Fact and Conclusions of Law
The following findings of fact and conclusions of law (FFCLs) by the
ALJ
were not disputed by either party to this appeal, and we therefore
adopt
them for purposes of our decision:
1. Petitioner is a physician specializing in physical medicine
and
rehabilitation (physiatry) and held a valid license to practice in
the
State of Florida prior to December, 1988.
2. On March 24, 1987, in the State of Pennsylvania,
Petitioner
delivered to another individual 100 tablets of oxycodone
hydrochloride
(generic Percocet) obtained by telephoning a false prescription
to a
local pharmacy. Percocet is a Schedule II narcotic
controlled
substance.
3. On March 24, 1987, a criminal information was filed
against
Petitioner in a Juniata County, Pennsylvania, court charging him
with
one count of delivering a controlled substance: 1) not in good
faith
within the scope of his professional practice; 2) outside of the
patient
relationship; and 3) not in accordance with treatment
principles
accepted by a responsible segment of the medical profession.
4. On August 3, 1987, in the Pennsylvania Court of Common
Pleas,
Petitioner pled guilty to, and was convicted of, the criminal
offense
alleged in the March 24, 1987 criminal information.
5. In December, 1988, the Florida Board of Medicine
revoked
Petitioner's license to practice medicine based on the events of
March
24, 1987, including telephoning a false prescription for a
controlled
substance, and on Petitioner's subsequent conviction.
6. The Florida Board of Medicine is a state licensing agency within
the
meaning of 1128(b)(4)(A) of the Act.
7. Telephoning a prescription to a pharmacy is a professional
activity
and is related to Petitioner's professional competence and
professional
performance.
8. Petitioner's license was revoked by the Florida Board of
Medicine
for reasons bearing on his professional competence and
professional
performance with[in] the meaning of section 1128(b)(4)(A) of the
Act.
9. By letter dated July 25, 1989, the I.G. notified Petitioner that
he
would be excluded from the Medicare and Medicaid programs until
he
obtained a valid license to practice medicine in Florida.
10. Section 1128(b)(4)(A) authorizes the Secretary of Health and
Human
Services (and his delegate, the I.G.), to impose and direct
exclusions
of individuals whose license to provide health care has been
revoked by
any State licensing authority for reasons bearing on
professional
competence or professional performance.
11. The I.G. had authority to exclude Petitioner under
section
1128(b)(4)(A) of the Act.
12. An indefinite exclusion is not required by section 1128(b)(4)(A)
of
the Act.
13. A purpose of section 1128(b)(4) of the Act is to
protect
beneficiaries and program funds by excluding individuals or
entities,
who by their conduct have demonstrated a risk that they may engage
in
fraud, substandard services, abuse, or unsafe practices, until such
time
as those excluded can demonstrate that such risk no longer exists.
14. An additional purpose of section 1128(b)(4) is to
prevent
individuals or entities from evading sanctions by moving from their
home
jurisdiction to avoid sanctions imposed there, and thus protect
the
integrity of State regulation of medical professional standards.
15. The legislative history of the Act illustrates that
Congress
intended that, in setting the period of exclusion in this type of
case,
such factors as the seriousness of the offense, the impact of both
the
offense and the exclusion on beneficiaries, and any
mitigating
circumstances, such as the availability of alternate providers of
needed
health care services, be considered.
16. The criminal offense of which Petitioner was convicted was
a
serious offense involving an abuse of physicians' privileges
to
prescribe controlled substances.
17. Petitioner was sentenced to a three-year term of probation,
which
was subsequently reduced to sixteen months.
18. Petitioner's criminal conduct did not have an adverse impact
on
program beneficiaries or recipients, or involve the Medicare or
Medicaid
programs.
19. Petitioner has never been the subject of formal complaints
by
either patients or other health care providers, other than one
patient
whose narcotic drugs were taken away by Petitioner.
20. Petitioner had attempted to limit distribution of
controlled
substances at the Altoona Veterans Administration (VA) Medical
Center.
21. Petitioner was suffering from a depressive illness which
affected
his judgment during the period in which he engaged in criminal
conduct.
22. Petitioner fulfilled the terms of his probation.
23. Since his conviction, Petitioner has participated in the
impaired
physician program in both Pennsylvania and New York, and continues
to
participate in the New York impaired physician program.
24. Since his conviction, Petitioner has continued psychotherapy
and
has demonstrated substantial improvement.
25. Petitioner has been satisfactorily employed since December 1987
at
the Harlem Valley Psychiatric Center and has also been working
with
physically disabled prisoners at the Green Haven Correctional
Facility
in New York. Green Haven has the only unit for disabled and
handicapped
inmates in the New York correctional system.
26. Petitioner's conduct subsequent to his conviction demonstrates
that
he is unlikely to again abuse his privileges as a physician.
27. Petitioner does not pose a substantial risk of harm
to
beneficiaries or recipients or to the integrity of the Medicare
and
Medicaid programs.
28. Petitioner was not practicing medicine or residing in Florida
at
the time his license was revoked in that State, nor does he intend
to
practice medicine or reside in Florida in the future.
29. Based on the events of March 24, 1987, and Petitioner's
subsequent
conviction, the Pennsylvania Board of Medicine revoked
Petitioner's
license to practice medicine in the State of Pennsylvania and
the
Georgia Board of Medical Examiners placed Petitioner's license
to
practice medicine in the State of Georgia on "inactive status"
subject
to revocation on certain conditions.
30. Petitioner has been practicing medicine and residing in the
State
of New York since December 1987 and did not move to New York to
avoid
sanction proceedings or sanctions.
31. Petitioner did not seek to evade sanctions by State
licensing
authorities, nor did he challenge the integrity of the State
regulation
of medical professionals.
32. The Act establishes neither minimum nor maximum periods
for
exclusions based on section 1128(b)(4)(A).
33. I have authority to modify the terms of the exclusion imposed
by
the I.G. against Petitioner.
34. It is a mitigating factor that Petitioner: (1) was suffering from
a
depressive illness which affected his judgment during the time in
which
he engaged in criminal conduct; (2) is continuing to seek treatment
for
his depression and has made progress with his psychiatric treatment;
and
(3) is providing a needed specialty to the New York correctional
system.
ALJ Decision, pages 3 - 7 (citations omitted).
Both Petitioner and the I.G. challenged the FFCLs which addressed
the
length of the exclusion. 2/ These were as follows:
35. The exclusion of Petitioner until he obtains a valid license
to
practice medicine in the State of Florida is excessive in light of:
(1)
the absence of substantial risk of harm to patients or the integrity
of
the Medicare and Medicaid programs; (2) the absence of any intent
to
evade sanctions or challenge the integrity of the State regulation
of
medical professionals; and (3) the mitigating circumstances
listed
above.
36. The remedial considerations of section 1128(b)(4)(A) of the
Act
will be served in this case by a three-year exclusion from the
Medicare
and Medicaid programs.
ALJ Decision, p. 7.
As discussed below, we conclude that FFCL #35 and FFCL #36 are
supported
by substantial evidence and are not erroneous, and we therefore
also
adopt them. Consequently, we affirm the ALJ's decision in its
entirety.
Analysis
Petitioner did not dispute the ALJ's finding that the I.G. had
authority
to exclude Petitioner under section 1128(b)(4)(A) of the Act (FFCL
#11).
Petitioner took the position, however, that a three-year exclusion
was
excessive under the circumstances of the case and that no exclusion
was
in fact warranted. In support of this position, Petitioner
asserted
that there was uncontradicted evidence in the record that
Petitioner's
crime was the result of his psychological difficulties and
naivete, that
Petitioner had since received professional care and had made
excellent
progress, and that Petitioner was not in danger of erring in the
future.
In responding to Petitioner's appeal, the I.G. argued that the
Board
should reinstate the original period of exclusion, which was
coterminous
with the period for which Petitioner's license was revoked by the
State
of Florida. A provision which would make this the minimum period
of
exclusion was included in proposed regulations published on April
2,
1990. 55 Fed. Reg. 12205, 12218. The I.G. took the position
that this
exclusion period was appropriate here because the licensing of
doctors
is a state function. The I.G. argued that, accordingly, "when a
state
revokes a license . . . , that same state should be the final
authority
on when the health care provider is fit to once again
practice
medicine." I.G. response dated January 22, 1991, p. 11.
We find no basis for disturbing the ALJ's judgment that an exclusion
was
justified and that a three-year exclusion period was appropriate.
After
providing Petitioner a hearing, the ALJ made a de novo
determination
regarding the appropriate period of an exclusion in this
case. See ALJ
Decision at p. 10. During the hearing, he had the
opportunity to
observe the demeanor of Petitioner and other witnesses and to
evaluate
their credibility. In contrast, our role as the forum for
the
administrative appeal of the ALJ decision is a limited one. See
Joyce
Faye Hughey, DAB No. 1221 (1990), and Carlos E. Zamora, M.D., DAB
No.
1104 (1989). As we noted in those decisions, our guidelines state
that
our standard of review on disputed issues of fact is "whether the
ALJ's
decision is supported by substantial evidence" and on disputed
legal
issues is whether "the ALJ's decision was erroneous." DAB
Guidelines,
Appendix B at 28-29 (1989). Thus, we may not substitute our
judgment
for that of the ALJ in this matter unless we find that his decision
was
erroneous or unsupported by substantial evidence. As explained
below,
we conclude that, under these standards, we must uphold the
ALJ's
decision.
The legislative history of section 1128(b) clearly indicates that
Congress
contemplated that an exclusion would be imposed for license
revocations
unless the license was taken away based on a minor
infraction. The
Senate report on the proposed legislation stated --
The Committee expects that the Secretary will not use
his
discretion under this authority to exclude individuals
whose
licenses have been suspended in the State in which they
are
practicing for minor infractions not relating to quality
of
care, such as failure to pay licensing fees or violations
of
strict advertising requirements. In these
limited
circumstances, the exclusion penalty would, in the
Committee's
view, be too harsh. However, the Committee expects
that the
Secretary in these instances will carefully review
the
circumstances of the license suspension to assure himself
that
the minor infraction was the sole reason for the loss
of
license.
S.REP. No. 109, 100th Cong., 1st Sess. 7 (1987).
Moreover, the legislative history of section 1128 as a whole
discusses
factors which may be considered in setting the exclusion
period. Both
the House and Senate reports on the proposed legislation
stated:
In the case of all exclusions other than those under 1128(a)
and
1128(b)(12), the Committee intends that, in setting the
period
of exclusion, the Secretary will take into consideration
such
factors as the seriousness of the offense, the impact of
both
the offense and the exclusion on beneficiaries, and
any
mitigating circumstances, such as the availability of
alternate
providers of needed health care services.
H.R.REP. No. 85, 100th Cong., 1st Sess., Part 1, 12 (1987); S.REP.
No.
109, supra, at 12.
There is no dispute that the revocation of Petitioner's license by
the
State of Florida was based on his conviction of a felony. Thus,
the
imposition of an exclusion based on revocation for this reason
was
clearly consistent with congressional intent.
Petitioner pointed to a number of mitigating factors in support of
his
position that a three-year exclusion period was excessive. We
agree
that Congress intended such factors to be considered in determining
the
appropriate exclusion period. However, it is clear in this case
that
the ALJ considered precisely the factors identified by
Petitioner.
Petititioner asserted that it was uncontradicted that his crime
was the
result of his psychological difficulties and naivete. This
was
recognized by the ALJ in FFCL #21, which states that "Petitioner
was
suffering from a depressive illness which affected his judgment
during
the period in which he engaged in criminal conduct." Petitioner
also
asserted that he had received professional care and had made
excellent
progress. This was recognized in FFCL #24, which stated that
"[s]ince
his conviction, Petitioner has continued psychotherapy and
has
demonstrated substantial improvement." Finally, Petitioner
asserted
that he was not in danger of erring in the future. This was
recognized
in FFCL #26, which stated that "Petitioner's conduct subsequent to
his
conviction demonstrates that he is unlikely to again abuse
his
privileges as a physician."
In light of these and other factors, the ALJ changed the period
of
exclusion from indefinite to three years. As a practical matter,
this
represented a substantial reduction of the exclusion period since
there
was no guarantee that Petitioner would ever regain his Florida
license.
Moreover, three years is less than the five-year minimum period of
a
mandatory exclusion under section 1128(a) of the Act. Accordingly,
we
find no basis for concluding that the ALJ acted improperly in
not
further reducing the exclusion period or in not eliminating
the
exclusion altogether. Although the ALJ recognized several
mitigating
factors, he also concluded that the license revocation was based
on the
commission of a "serious offense" (FFCL #16) and that a
three-year
exclusion was therefore appropriate.
We also find no basis for concluding that the ALJ acted improperly in
not
retaining the original exclusion period. There is no explicit
statement
in section 1128(b)(4) that the exclusion period should be
coterminous with
the period of the license revocation on which it is
based. Moreover,
there is nothing in the legislative history that is
inconsistent with the
approach taken by the ALJ since Congress expressed
an intent that the
exclusion period would be set taking into
consideration factors including the
seriousness of the offense, the
impact of the offense and the exclusion on
beneficiaries, and any
mitigating circumstances. Consideration of these
various factors would
not be necessary if the exclusion period was intended
to be tied
automatically to the length of the license revocation. In
addition, the
I.G. himself conceded that the statute does not require the
exclusion
period which he imposed here. I.G. response dated 1/22/91, p.
12.
Moreover, although the proposed regulations would require that
exclusion
period, they are not as yet binding since they have not been
promulgated
in final form. See Hughey, supra, and Walter J. Mikolinski,
Jr., DAB
No. 1156 (1990).
The I.G. thus failed to establish that the ALJ erred as a matter of law
in
reducing the exclusion period. In addition, the I.G. did not
challenge
the ALJ's finding identifying mitigating factors present in
the case (FFCL
#34). The ALJ's reduction of the exclusion period was
expressly based
on these factors. Accordingly, the I.G. has shown no
basis for
reinstating the original exclusion period.
Conclusion
Based on the foregoing, we affirm the three-year exclusion imposed
on
Petitioner.
_____________________________ Donald F. Garrett
_____________________________ Theodore J. Roumel U.S.
Public
Health Service
_____________________________ Cecilia Sparks Ford
Presiding
Panel Member. 1. "State health care program" is defined
by
section 1128(h) of the Act to include any state plan approved
under
title XIX of the Act. The term "Medicaid" is used in this
decision to
represent all state health care programs from which the I.G.
directed
that Petitioner be excluded.
2. In a letter to the parties dated 12/26/90, the Panel noted
that,
although Petitioner's appeal did not specifically dispute any FFCLs,
it
appeared that Petitioner was disputing only FFCL #36. Petitioner
did
not ask for leave to amend his appeal to clarify this matter, nor
did
the I.G. identify any other FFCLs as in dispute. Accordingly,
we
proceed on the assumption that only FFCL #36 and the closely
related
FFCL #35 are in